European Union countries will seek to present a united front in the coming days against U.S. President Donald Trump's tariffs, likely approving a first set of targeted countermeasures on up to $28 billion of U.S. imports from dental floss to diamonds.
Such a move would mean the EU joining China and Canada in imposing retaliatory tariffs on the United States in an early escalation of what some fear will become a global trade war, making goods more expensive for billions of consumers and pushing economies around the world into recession.
The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars and "reciprocal" tariffs of 20% from Wednesday for almost all other goods.
Trump's tariffs cover some 70% of the EU's exports to the United States - worth in total 532 billion euros ($585 billion) last year - with likely duties on copper, pharmaceuticals, semiconductors and timber still to come.
The European Commission, which coordinates EU trade policy, will propose to members late on Monday a list of U.S. products to hit with extra duties in response to Trump's steel and aluminium tariffs rather than the broader reciprocal levies.
It is set to include U.S. meat, cereals, wine, wood and clothing as well as chewing gum, dental floss, vacuum cleaners and toilet paper.
One product that has received more attention and exposed discord in the bloc is bourbon. The Commission has earmarked a 50% tariff, prompting Trump to threaten a 200% counter-tariff on EU alcoholic drinks if the bloc goes ahead.
Wine exporters France and Italy have both expressed concern. The EU, whose economy is heavily reliant on free trade, is keen to make sure it has wide backing for any response so as to keep the pressure up on Trump ultimately to enter negotiations.
Luxembourg will earlier on Monday host the first EU-wide political meeting since Trump's announcement of the sweeping tariffs when ministers responsible for trade from the 27 EU members will exchange views on the impact and how best to respond.
EU diplomats said the main aim of the meeting was to emerge with a united message of a desire to negotiate with Washington a removal of tariffs, but a readiness to respond with countermeasures if that failed.
"Our biggest fear after Brexit was bilateral deals and a break of unity, but through three or four years of negotiations that did not happen. Of course, here you have a different story, but everyone can see an interest in a common commercial policy," one EU diplomat said.
COUNTER-TARIFFS
Among EU members, there is a spectrum of opinion on how to respond. France has said the EU should work on a package going well beyond tariffs and French President Emmanuel Macron has suggested European companies should suspend investments in the United States until "things are clarified".
Ireland, almost a third of whose exports go to the United States, has called for a "considered and measured" response, while Italy, the EU's third largest exporter to the U.S., has questioned whether the EU should hit back at all.
"It's a difficult balance. Measures cannot be too soft to bring the United States to the table, but not too tough to lead to escalation," one EU diplomat said.
Talks with Washington to date have not borne fruit. EU trade chief Maros Sefcovic described his two-hour exchange with U.S. counterparts on Friday as "frank" as he told them U.S. tariffs were "damaging, unjustified".
The initial EU counter-tariffs will in any case be put to a vote on Wednesday and will be approved except in the unlikely event that a qualified majority of 15 EU members representing 65% of the EU's population oppose it.
They would enter force in two stages, a smaller part on April 15 and the rest a month later.
Commission President Ursula von der Leyen will also hold separate discussions on Monday and Tuesday with chief executives from the steel, automotive and pharmaceutical sectors to assess the impact of tariffs and determine what to do next.($1 = 0.9102 euros)
